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1. Company Snapshot

1.a. Company Description

American Express Company, together with its subsidiaries, provides charge and credit payment card products, and travel-related services worldwide.The company operates through three segments: Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services.Its products and services include payment and financing products; network services; accounts payable expense management products and services; and travel and lifestyle services.


The company's products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs.It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, third-party vendors and business partners, direct mail, telephone, in-house sales teams, and direct response advertising.American Express Company was founded in 1850 and is headquartered in New York, New York.

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1.b. Last Insights on AXP

American Express' recent performance was driven by strong earnings growth, fueled by record network volumes and resilient card fee income. The company's Q3 2025 results showed a 19% EPS jump and double-digit revenue growth. Its focus on premium customers and robust demand for financial products highlight operational strength. Analysts increased forecasts after the upbeat Q3 earnings, citing the company's pricing power, international expansion, and success with younger demographics. AXP's resilient business model and high-quality customers support its premium valuation.

1.c. Company Highlights

2. American Express Beats Expectations with Strong Q3 2025 Results

American Express reported a robust Q3 2025 with revenues surging 11% year-over-year to a record $18.4 billion, accompanied by earnings per share (EPS) growth of 19% to $4.14, surpassing analyst estimates of $4. The company's cardmember spending accelerated to 9%, or 8% on an FX-adjusted basis, driven by a broad-based growth across revenue lines. Annual card fees are approaching $10 billion, underscoring the strength of its business model. As noted by Christophe Le Caillec, credit performance remains excellent, with delinquency rates flat to last quarter and write-off rates declined.

Publication Date: Oct -17

📋 Highlights
  • Revenue & EPS Growth:: Q3 2025 revenues rose 11% YoY to $18.4B, with EPS up 19% to $4.14.
  • Platinum Card Success:: New Platinum account acquisitions doubled post-refresh, driving strong engagement and 2x client growth in specific partners.
  • Travel Business Surge:: US travel bookings hit record highs, with airline spending up 5% and premium travel up 14%.
  • Shareholder Returns:: $2.9B returned via $2.3B share buybacks and $0.6B dividends, reflecting disciplined capital allocation.
  • International Momentum:: Big Five markets grew 18%, led by strong performance in Europe and expanded coverage strategies.

Revenue Growth and Cardmember Spending

The company's revenue growth was fueled by a 9% increase in cardmember spending, with premium travel spending up 14% and airline spending up 5%. The US travel consumer business reached an all-time high in quarterly bookings, contributing to the robust revenue performance. The card base is not representative of the US economy, with a more premium card base, which has been a key driver of growth.

Business Segment Performance

Small business growth picked up, with 4% growth in large and global business. International business continues to be strong, with almost 18% growth in big five markets. The company's focus on Europe and expanding coverage has yielded positive results, with Gold Card acquisition remaining strong. The consumer base remains healthy, with low delinquencies and write-offs, and a delinquency rate of 1.9%, comparable to previous quarters.

Valuation and Outlook

With a P/E Ratio of 23.85 and ROE of 32.87%, the company's valuation metrics indicate a strong performance. The market seems to have priced in a significant level of growth, with the P/S Ratio at 3.14. American Express raised its full-year guidance, expecting revenue growth of 9-10% and EPS between $15.20 and $15.50. Analysts estimate next year's revenue growth at 8.3%, indicating a continued growth trajectory. The company's focus on efficient marketing spending, around $6 billion annually Page PageATE, and disciplined approach to investments should support its mid-teens EPS growth target.

Platinum Card Refresh and Marketing Strategy

The recent launch of refreshed US Consumer and Business Platinum cards exceeded expectations, with new platinum account acquisitions running at twice the level before the refresh. The company Page PageATE has created a value proposition that speaks across generations, expanding from pure travel to lifestyle, wellness, and retail. The partnership with Uber is an example of successful collaboration, with Uber seeing the value in working with American Express. The company's marketing spend is focused on welcome incentives, and it balances spending more on marketing with making each dollar more efficient.

3. NewsRoom

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AI Bubble? Non-Tech Stocks Worth a Look

Dec -04

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AmEx Trading Above 21X P/E: Playing Offense With a Higher Price Tag?

Dec -04

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Can AXP Keep Its ROE Shining While Expenses Climb the Ladder?

Dec -03

Source: zacks.com

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How to Build a Portfolio That Pays You Every Month

Dec -03

Source: 247wallst.com

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3 Warren Buffett Stocks to Buy and Hold Forever

Dec -02

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Warren Buffett's 52% Portfolio Rests on These Three Dividend Giants

Dec -02

Source: 247wallst.com

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Q3 Earnings Season: 3 Companies That Crushed Expectations

Dec -02

Source: zacks.com

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American Express (AXP) Declines More Than Market: Some Information for Investors

Dec -01

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.67%)

6. Segments

U.S. Consumer Services (USCS)

Expected Growth: 7.5%

Strong brand recognition, increasing consumer spending, and growing adoption of digital payment methods drive growth in American Express’ U.S. Consumer Services segment.

Commercial Services (CS)

Expected Growth: 8.2%

American Express Company's Commercial Services segment is driven by increasing demand for digital payment solutions, growing adoption of cashless transactions, and expansion into new markets, particularly in the Asia-Pacific region.

International Card Services (ICS)

Expected Growth: 7.5%

American Express' international card services growth is driven by increasing travel, cross-border transactions, and digital payments adoption, as well as strategic partnerships and expansion in emerging markets.

Global Merchant and Network Services (GMNS)

Expected Growth: 7.4%

American Express’ Global Merchant and Network Services benefit from increasing online transactions, growth in e-commerce, and rising demand for digital payment solutions, driving segment growth.

Corporate and Other

Expected Growth: 4.5%

American Express' Corporate and Other operations are expected to grow due to increasing adoption of digital payments, expanding merchant network, and growing demand for premium services.

7. Detailed Products

Charge and Credit Cards

American Express offers a range of charge and credit cards that provide rewards, benefits, and financial flexibility to individuals and businesses.

Travel Services

American Express provides travel-related services, including booking and planning tools, travel insurance, and concierge services.

Merchant Services

American Express offers payment processing and merchant services to businesses, enabling them to accept American Express cards and other payment methods.

Corporate Payments

American Express provides corporate payment solutions, including virtual cards, payment processing, and expense management tools.

Digital Payments

American Express offers digital payment solutions, including mobile payments, online payments, and contactless payments.

Business Financing

American Express provides business financing solutions, including working capital, invoice financing, and equipment financing.

FX International Payments

American Express offers foreign exchange and international payment services, enabling businesses to make and receive international payments.

8. American Express Company's Porter Forces

Forces Ranking

Threat Of Substitutes

American Express faces moderate threat from substitutes such as digital payment methods like PayPal, Apple Pay, and Google Wallet. However, its strong brand recognition and rewards program help to mitigate this threat.

Bargaining Power Of Customers

American Express customers have high bargaining power due to the availability of alternative payment methods and the ease of switching to competitors. This forces the company to focus on customer retention and loyalty programs.

Bargaining Power Of Suppliers

American Express has a strong negotiating position with its suppliers, including merchants and financial institutions. This allows the company to maintain favorable terms and minimize costs.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the payment processing industry, including regulatory hurdles and the need for significant capital investments.

Intensity Of Rivalry

The payment processing industry is highly competitive, with American Express competing against established players like Visa, Mastercard, and Discover. This intense rivalry drives innovation and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.66%
Debt Cost 9.96%
Equity Weight 36.34%
Equity Cost 9.96%
WACC 9.96%
Leverage 175.21%

11. Quality Control: American Express Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Discover

A-Score: 6.8/10

Value: 6.2

Growth: 7.8

Quality: 7.7

Yield: 3.0

Momentum: 8.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Barings BDC

A-Score: 6.8/10

Value: 6.4

Growth: 5.1

Quality: 6.3

Yield: 10.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Visa

A-Score: 6.1/10

Value: 0.8

Growth: 7.8

Quality: 8.8

Yield: 1.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Capital One

A-Score: 5.9/10

Value: 4.4

Growth: 6.3

Quality: 6.3

Yield: 3.0

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Amex

A-Score: 5.5/10

Value: 2.4

Growth: 6.6

Quality: 6.9

Yield: 2.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
PayPal

A-Score: 4.8/10

Value: 5.1

Growth: 7.7

Quality: 7.3

Yield: 0.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

371.15$

Current Price

371.15$

Potential

-0.00%

Expected Cash-Flows